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New Jersey’s Fiscal Problems are Biggest Concern for Business Owners says NJCPA

Phil Murphy

the satff of the Ridgewood blog

ROSELAND NJ, The greatest issue impacting the operation of a business in New Jersey over the next 12 months is the state’s fiscal problems, according to nearly 30 percent of the 347 respondents in a survey conducted by the New Jersey Society of CPAs (NJCPA) earlier this month. State and local taxes ranked second at nearly 27 percent.

On a broader scale, respondents cited high taxes, pension and health benefits funding for public employees, and regulatory burdens as the top issues that are likely to hinder the state’s future economic growth. Rising health care costs and decaying infrastructure also rounded out their main concerns.

Continue reading New Jersey’s Fiscal Problems are Biggest Concern for Business Owners says NJCPA
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NJ’s teachers’ pension fund (TPAF) will be bankrupt by 2029

the staff of the Ridgewood blog

Ridgewood NJ, according to Garden State Initiative the NJ’s teachers’ pension fund (TPAF) will be bankrupt by 2029 & Public Employees’ Retirement System (PERS) by 2034.

There is a current unfunded liability of $41 billion in the TPAF & PERS pension funds for teachers and state employees that will rise to $51 billion in 2023.

This is unsustainable for New Jersey taxpayers who are facing a fiscal cliff of tax increases to pay for public employee pensions. Reform is needed. Now.

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Senate President Steve Sweeney: “We have to face up to the reality of the deep fiscal crisis we are facing”

Steve-Sweeney-Atlantic-City-finances

the staff of the Ridgewood blog

New Brunswick NJ,  Speaking at a public policy forum at Rutgers University’s Eagleton Institute of Politics, Senate President Steve Sweeney discussed the cost-cutting reforms in the “Path to Progress” report, including those that will produce savings and efficiencies for municipalities, county governments, local school districts and their employees.

Continue reading Senate President Steve Sweeney: “We have to face up to the reality of the deep fiscal crisis we are facing”
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Jersey First President Rosemary Becchi , “The financial problems with New Jersey’s government finances are rooted largely in the state’s largest liability, the state pension system”

“New Jersey has become increasingly unaffordable for most of us. This budget will make that problem much worse.”

the staff of the Ridgewood blog

Trenton NJ, Jersey First President Rosemary Becchi Urges Legislature to Act on Pension & Benefits Reform during Assembly Budget Hearings

Jersey First President Rosemary Becchi testified against the adoption of Gov. Murphy’s proposed 2020 Fiscal Year Budget today, urging the Assembly Budget Committee to first grapple with the root causes of New Jersey’s financial crisis and end policies that are forcing families and businesses to move out of the state.

Continue reading Jersey First President Rosemary Becchi , “The financial problems with New Jersey’s government finances are rooted largely in the state’s largest liability, the state pension system”
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New Jersey Financial Literacy Education Bill Signed?

money

the staff of the Ridgewood blog

Jersey City NJ, does anyone find the humor in the very idea that the financial illiterates in Trenton have signed a bill requiring “financial literacy” to be taught in schools?

Perhaps it should be a required coarse for the Governor and the state assembly . Dare we even go so far as to say even ex-governors should be forced to take the starting with former governor Whitman.

Acting Governor Sheila Oliver signed legislation (A-1414) requiring school districts to provide financial literacy education to middle school students in grades six through eight. The financial literacy instruction will emphasize budgeting, saving, credit, debt, insurance, investment, and other issues associated with personal financial responsibility to ensure New Jersey’s youth have access to the tools and foundation needed for sound financial decision-making.

“Financial responsibility is an important acquired and learned life skill and with the increasing financial challenges millennials face, it is a skill that must be a necessary part of our educational curriculum,” said Acting Governor Sheila Oliver. “Governor Murphy and I are happy to partner with the Legislature by signing this bill today to help New Jersey students learn how to effectively manage their personal finances and help set them up for success in life.”

Primary sponsors of the bill include Senators Dawn Marie Addiego and Ron Rice; and Assemblymembers Angela McKnight, Nicholas Chiaravalloti, Eliana Pintor Marin, Jamel Holley, Benjie Wimberly, and Annette Quijano.

“I am delighted the financial literacy bill was signed into law, so students can receive education on key topics that they will need for the rest of their lives,” said Senator Addiego. “We must reach people early on in life so they can plan ahead and build a foundation of financial knowledge that will help them live an independent lifestyle.”

“One of the most important lessons a person can learn is how to manage their money. Many young people go into adulthood knowing little about finances, and end up making decisions that cost them in the long run,” said Assemblywoman McKnight. “Teaching our kids early about the importance of managing their money and making sound financial decisions can prevent them from making costly mistakes and set them on the right financial path.”

“This bill would allow financial education to be infused into currents subjects, helping younger students in Jersey City and across the state get a head start on understanding the very things that will impact them every day,” said Jersey City Mayor Steven M. Fulop. “Learning about credit, investing, savings and other financial aspects are critical tools to building a foundation and setting our students up to succeed. Financial literacy is already being taught at the high school level, and we’re excited to expand this to younger students at the start of the new school year in September.”

Acting Governor Oliver signed the bill at President Barack Obama Elementary School – PS 34 in Jersey City.

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Pennacchio & Corrado Bill to Combat Conflicts of Interest State Investment Council

Lehman_Brothers_Times_Square_by_David_Shankbone[1]

March 26, 2018

the staff of the Ridgewood blog

Bill Aims to Stop Corruption on NJ State Investment Council In Wake of Pension Scandals
Legislation sponsored by Senate Republicans Joe Pennacchio and Kristin Corrado to combat corruption on the State Investment Council, by forbidding members from voting on investments that present a financial or familial conflict of interest, has passed the New Jersey Senate.

Ridgewood NJ, Sens. Joe Pennacchio and Kristin Corrado’s bill would combat corruption on the State Investment Council, by forbidding members from voting on investments that present a financial or familial conflict of interest. The bill was introduced in response to scandals involving the council and the state pension system. (Pixabay)
“State Investment Council members should serve the people of New Jersey, not themselves,” Senator Pennacchio (R-26) said. “We cannot turn a blind eye to the despicable violations of public trust that have occurred in recent years. People who handle taxpayer dollars must be held accountable.”

The Senators’ bill, S-396, was introduced in light of reports that in 2008, the State Investment Council invested in Lehman Brothers right before the firm went bankrupt. The Lehman Brothers managers who sat on the council did not recuse themselves prior to voting to approve the investment in their firm. The misguided vote cost the pension system nearly $116 million.
Additionally, in 2014, concerns arose that Robert Grady, the former chairman of the council, had invested public money into a fund which his own private firm also invested in. Such potential conflicts of interest would not be tolerated under the Pennacchio/Corrado legislation.

The State Investment Council was created by the New Jersey Legislature in 1950 to develop policies governing the investment of funds by the Director of the Division of Investment.
S-396, would require members of the State Investment Council to recuse themselves from a vote if the matter before the council involves one of the following conflicts of interest:
The member or their spouse is or was employed by the entity in which the investment is being made.

The member or their spouse has a direct investment exceeding $5,000 in the entity in which the investment is being made.

Under S-396, a member who breaks this law would be removed from the council, and must be immediately reported to the Governor and the Legislature.
“Any member who casts a vote despite an obvious conflict of interest does not deserve to sit on the State Investment Council,” Senator Corrado (R-40) said. “The hardworking families we represent must be able to trust that the state is investing and spending these funds wisely. This legislation will ensure council members who use public money for personal or political gain are punished accordingly.”

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Reader says Pension Crisis requires a number of solutions

Pension_refrom_theridgewoodblog

The issue requires a number of solutions

1) Stop all new public employee hires from getting a paid pension Enable a 401k retirement plan similar to what many private employees subscribe to Why should we pay for these employees for decades they aren’t working
2) significantly increase public employee health care contributions This is real requirement for any chance at resolving the costs issue
3) increase the time worked requirement to 30 years and stop the multiple public job/pension/health cycle If you retire from a public role you are not eligible for another public pension
4) reduce the union requirements for public work contracts NJ costs to build are ridiculous due to union requirements This is sole reason states such as Florida have significantly less cost to build anything Put the bids out for all laborers union or not and set a fair price
5) Absolutey need to consolidate the various towns schools, fire, police, etc There has to be a way to provide services while consolidating and cutting overhead costs How many school administrators, fire trucks, vehicles, police officers are really needed in these small villages How many police and fire personal are getting paid or on pension just in RW?

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Trenton Politicians Always Pay Themselves First

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December 15,2017

the staff of the Ridgewood blog

Trenton NJ, A state Senate panel quickly advanced a Democratic bill that would give some elected officials bigger pensions, pushing through a vote on Thursday in about one minute and without any debate or public testimony.

The New Jersey Pension and Health Benefits Commission has stated that there are a combined $90 billion in unfunded liabilities for future pension and retiree healthcare benefits .

The bill known as (S3620) would allow certain elected officials, such as the outgoing Camden Mayor Dana Redd, to re-enroll in the Public Employees’ Retirement System (PERS) even if they were removed due to switching from one elected office to another.

Effectively, the bill creates a special exemption that allows Redd to cash in on a bigger public pension at a time when public workers who are not politically connected have seen cutbacks to their benefits and a freeze in yearly cost-of-living adjustments for retirees since 2011.

The legislation  is moving quickly because Senate President Steve Sweeney (D-Gloucester), a Redd ally, has given the bill  special status, allowing it to move forward without a customary review by a public body that scrutinizes the cost of pension and health benefits legislation and makes recommendations to lawmakers.

In a “hail Mary” the bill could be approved by the Assembly and Senate and signed by Gov. Chris Christie who is another Redd ally during the waning days of the lame-duck Legislature. A full vote in the Assembly and Senate could be held on the bill before the legislative session ends on Jan. 9.

 

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New Jersey Taxes Going through the Roof ,Run For Your Life

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file photo by Boyd Loving

November 29,2017

the staff of the Ridgewood blog

Ridgewood NJ, according to the Bergen Record ,Democratic Gov.-elect Phil Murphy said Tuesday that he is “confident” his proposal to increase taxes on New Jersey’s millionaires will go through, even as Democratic leaders in the Legislature have cooled on the idea in light of GOP tax plans being considered in Congress.

Murphy and his Democratic allies say that the bill would increase taxes on income over $1 million from a top rate of 8.97 percent to 10.75 percent. The Fantasy is that the new tax could generate up to $600 million for the state, which Murphy claims the state will use to increase funding for New Jersey’s public schools.

The are going to need it ,again according to the Bergen Record there will be $1.2 billion less revenue available next fiscal year than the current year. Specifically: $700 million in one-time revenues are in the current budget . The two largest being $300 million in legal settlements principally related to environmental claims and $321 million for sale of public broadcasting assets. And, the continued phase out of the estate tax, a decrease in the sales tax rate and exclusions/deductions in the income tax will result in $520 million less revenue from these sources.

The remaining tax base will yield $1 billion at best and that ‘s not sufficient to cover the lost revenue and address normal program growth. How to address this “squeeze” will be a challenge.

The current year or 2018 looks equally disturbing, the current budget has only a $409 million surplus that’s barely 1 percent of spending. There is no money in the Rainy Day Fund.

An none of this is taking into account greater outmigration according to Jordan Amin, a tax partner at EisnerAmper, “I think where some of these provisions that are affecting New Jersey harder than some other states — like the repeal of the state and local tax deductions — the incoming governor wants to increase the highest income tax rate in the state, currently 9 percent, to 10.75 percent, and I think that that may meet some opposition, now that some of the state taxes are not going to be deductible at the federal level. And we have all read about people supposedly fleeing New Jersey for other low-tax or no-tax jurisdictions, such as Florida. I think that there is some concern (the tax) … could cause a greater migration outward.”

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New Jersey’s public-pension system currently holds less than 38 percent of what the state owes its retirees

Phill Murphy Clear Water

November 27,2017

the staff of the Ridgewood blog

Trenton NJ, according to Michael Lilley in the article New Jersey Public Unions, Ascendant https://www.city-journal.org/html/new-jersey-public-unions-ascendant-15568.html ,

“New Jersey’s public-pension system currently holds less than 38 percent of what the state owes its retirees, which amounts to a $135 billion shortfall. Adding to this unfunded liability, the state also owes retirees $67 billion for future health-care payments, and has set aside no money for that obligation. That’s a combined tab of $202 billion. The entire state budget, by contrast, is $35 billion. To fund its obligations properly, the state would have to put aside $4.8 billion a year, or almost 15 percent of the budget; those costs are expected to grow to $11.3 billion by 2027. Unreformed, the cost of these benefits is unsustainable. During his campaign, Murphy promised to fix the pension system by fully funding it, though he wouldn’t give specifics.”

A very ugly reality for the governor elect , but even uglier for taxpayers is the fact that ,” Murphy’s problem, however, is that his biggest allies, especially the teachers’ union, contributed mightily to the pension mess over the years by winning plush benefits, acquiescing to accounting gimmicks that made the system look well-funded, and fighting against cost-saving reforms. Murphy has already proposed $1.3 billion in new taxes, and without making the changes to the pension system that the unions oppose, the state’s taxpayers face years of additional tax increases and spending cuts to pay the pension bill.”

Lilley goes on , “Murphy’s pledge helped win endorsements from the NJEA and other public-sector unions. By law, public school teachers must join the NJEA or, if they decline, pay a so-called agency fee to the union representing 85 percent of dues. The money is deducted from their paychecks, which are largely funded by local property taxes. Last year, the NJEA took in over $120 million in union dues and agency fees. Since 1994, the union has collected $1.85 billion, and it has invested much of this money in New Jersey politics: since 1994, the NJEA has spent $874 million on political activities, or about 56 percent of its annual operational expenditures, an average of $38 million a year.”

A beholden bought ad paid for  politician and a massive pension short fall can mean only one thing ,massive new taxes .